2.56. The methods used in collecting and compiling balance of payments statistics have an impact on their accuracy and it is therefore important that all aspects of the process be soundly based. The following paragraphs describe some of the issues involved.

2.57. First, where data are collected directly from transactors, it is necessary to identify the population of statistical units (e.g. businesses or households) from which units will be selected for inclusion in a collection. In practice, this may be difficult. ABS collections used to estimate the balance of payments often have no comprehensive sources of coverage and have to rely on using several partial sources to identify the population engaged in the activity being measured. This raises the possibility of undercoverage and the ABS needs to be particularly careful in building up collection populations in this way.

2.58. Second, it is important that the information sought is in fact available from the units approached and that they have a clear understanding of the requirements of a collection. Good forms design and adequate pilot testing are essential parts of this process; the ABS pays particular attention to this and has developed a set of forms design standards aimed at clarity and minimising reporting burden.

2.59. Third, it is necessary that near complete collection response be obtained and that the integrity of the reported data be maintained. In practice, there will be less than complete response, errors will be present in reported data and others will arise as a result of office-processing activity. Effective procedures are therefore necessary to compensate for non-response, to identify and correct errors in the data and to avoid processing errors.

2.60. Fourth, part of ensuring good quality statistics involves having effective monitoring procedures in place so that, if any aspect of the collection falls below established tolerances, it will be detected and corrective action taken. Examples of indicators of statistical quality that are typically monitored include numbers of collection units, response rates (with emphasis being given to the more important contributors), the number and value of errors identified and corrected, and the resources involved in the various tasks. The ABS has comprehensive quality monitoring procedures in place for balance of payments statistics.

2.61. Finally, in a period of rapid economic change, the changing population of transactors and the introduction of new types of transactions could both have substantial impact on quality unless action is taken to accommodate the changes within the statistics. The relatively recent rapid expansion of trading in financial derivatives is a case in point where the rapid change has meant that the transactors often do not have comprehensive reporting capabilities in their accounting systems to provide appropriate data to the ABS. The ABS is working with those entities transacting in foreign financial derivatives to bring their reporting fully within the ambit of the Survey of Foreign Investment.